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If the Economy Is at Potential Output and the Fed

question 245

Multiple Choice

If the economy is at potential output and the Fed increases the money supply so that actual output exceeds potential output, eventually nominal wages will:


Definitions:

Reaction Formation

A psychological defense mechanism in which a person unconsciously replaces unacceptable thoughts or feelings with their opposites.

Phallic Stage

A phase in Freud's psychosexual development theory, occurring from about ages 3 to 6, where the libido's focus is on the genital area.

Psychosexual Development

A Freudian theory that proposes that child development occurs in a series of stages which are characterized by sexual pleasures focusing on different parts of the body.

Flirtatious

Exhibiting behavior aimed at attracting or engaging someone romantically or sexually through acts or remarks that suggest interest without explicit intention.

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